A few years ago, Elon Musk tried to get Apple CEO Tim Cook interested in buying Tesla, Musk said in a Tweet Tuesday. “He refused to take the meeting,” Musk added.
According to Musk, this took place in the “darkest days of the Model 3 program” – most likely in late 2017 or early 2018. Musk recently disclosure that at one point at the beginning of the Model 3 manufacturing process, Tesla was “about a month away” from bankruptcy.
“The Model 3 ramp has been extremely stressed and painful for a long time – from mid-2017 to mid-2019,” Musk wrote in November. “The production and logistics of hell.”
Although the Model 3 was not Tesla’s first car, it was the company’s first attempt to build a mass-market vehicle – one that could sell for less than $ 40,000 and therefore earn hundreds of thousands. of customers every year. While the car was cheaper, the equipment needed to make it on a larger scale was more expensive than Tesla’s previous production lines.
Musk had an ambitious plan to automate the Model 3 production process, using robots for tasks that were traditionally performed by human workers. But things didn’t work out the way Musk hoped. Building the necessary robots was more difficult and expensive than expected. Some did not work properly. So Tesla was eventually forced to reduce its automation plans and build a more conventional assembly line.
“Excessive automation at Tesla was a mistake,” Musk said accepted in 2018. “People are underestimated.”
Designing the Model 3 and setting up the production line was so costly that Tesla’s survival depended on the success of the Model 3. If Tesla had not been able to start selling the Model 3 in volume by mid-2018, it would have run out of cash and he probably couldn’t have served his multi-billion dollar debt.
Tim Cook was not interested
Apparently, at some point in the process, Musk became so worried about Tesla’s survival that he considered selling the company. Apple would have been a logical candidate. It was (and is) one of the largest companies on the planet, with over $ 70 billion in cash and short-term investments. It could easily have allowed Tesla’s $ 60 billion market valuation.
Apple and Tesla also have similar design philosophies. Both are known for their vertical integration, creating their own hardware and software and selling their products online and in company-owned stores.
But according to Musk, Apple CEO Tim Cook was not interested. When Musk contacted Cook in 2017 or 2018, Cook even refused to take a meeting on the subject.
When Musk contacted Cook, Apple had been working on a car project called Project Titan for several years. It seems that Titan started as a plan to build an “Apple car”, but then reduced itself to creating autopilot software to license existing car manufacturers. On Monday, Reuters reported that Apple is working again to create its own car.
With the advantage of the retrospective, it seems that buying Tesla at the end of 2017 would have been a good deal for Apple. Tesla’s market capitalization is 10 times higher than in 2017. After the rocky launch of the Model 3 in 2017 and 2018, things started to go easier. Tesla launched the Y model on time, built a factory in China and is now working on building two more factories in Texas and Germany.
Musk’s offer to Cook was not the first time he had considered selling Tesla. According to a 2015 biography of Musk by Ashlee Vance, Tesla had a similar crisis in the first quarter of 2013. The Model S was launched the previous year, but early sales were so slow that Tesla’s survival was put in jeopardy. discussion.
According to Vance, Musk entered into a “handshake agreement” with Google founder Larry Page in March to buy the company for about $ 6 billion. But while lawyers demanded details, sales of the Model S improved enough to take Tesla out of immediate danger. Tesla posted an unexpected profit in the first quarter, and Tesla’s share price rose. Tesla remained independent.